U.S. Department 

of Transportation 

Federal Railroad 

Administration 

NOV 2 4 2014 

Thomas C. Fellenz 

Chief Counsel 

California High-Speed Rail Authority 

770 L Street, Suite 800 

Sacramento, CA 95814 

Administrator 1200 New Jersey Avenue, SE 

Washington, DC 20590 

Re: Request for Waiver of Buy America Requirement for Two Prototype Next Generation 

Trainsets 

Dear Mr. Fellenz: 

This letter is in response to your request dated February 28, 2014, that the Federal Railroad 

Administration (FRA) grant the California High-Speed Rail Authority (the Authority), a 

waiver from FRA's Buy America provision, at 49 U.S. C. § 24405(a)(1), for final assembly of 

two prototype high-speed rail (HSR) trainsets. For the reasons contained in this letter, FRA is 

granting the Authority's request, subject to the following condition: 

• At ''Notice To Proceed", the Authority must provide support for its assertion and 

certify to FRA that its selected supplier has not established domestic manufacturing 

facilities capable of assembling the prototypes within a reasonable time. 

The larger projects underlying this waiver are Amtrak's and the Authority's plans to advance 

HSR on the Northeast Corridor (NEC) and in California, respectively. In the near identical 

waiver requests 1

, Amtrak and the Authority assert that the projects require the purchase and 

use of high-quality, service-proven FRA Tier III Next Generation Trainsets, including two 

prototype HSR trainsets for each project. Amtrak states that HSR trainsets are essential to 

meeting Amtrak's critical short-term need to expand the capacity of its current NEC highspeed service and meeting the long-term operational needs of Amtrak. The Authority is 

seeking trainsets that can meet its planned trip-time requirements for service from the San 

Francisco Bay Area to Los Angeles on what will be largely brand new infrastructure. Amtrak 

and the Authority further assert that each project requires the purchase and use of two 

prototype HSR trainsets and that there are no domestic facilities capable of producing and 

testing HSR trainsets operating at greater than 160 miles per hour (mph). 

1 Amtrak's and the Authority's waiver requests are available at https://www.fra.dot.gov/eLib/Details/L04954 and 

https :/ /www. fra. dot. gov I eLib/Details/L049 55, respectively. 
2 

FRA's Buy America requirement for rolling stock, including HSR trainsets, requires domestic 

final assembly of the trainsets and that all of the components be manufactured in the United 

States. Section 24405(a)(2) also permits the Secretary (delegated to the FRA Administrator) 

to waive the Buy America requirements if the Secretary finds that: (A) applying paragraph (1) 

would be inconsistent with the public interest; (B) the steel, iron, and goods manufactured in 

the United States are not produced in sufficient and reasonably available amount or are not of 

a satisfactory quality; (C) rolling stock or power train equipment cannot be bought or 

delivered to the United States within a reasonable time; or (D) including domestic material 

will increase the cost of the overall project by more than 25 percent. 

FRA believes a waiver is appropriate under 49 U.S.C. §24405(a)(2)(C) because domestically 

produced HSR trainsets meeting the specific technical, design, and schedule needs of Amtrak 

and the Authority are not currently available in the U.S. There is no assembly or testing 

facility for HSR trainsets operating at speeds greater than160 mph in the U.S. Moreover, 

domestically-produced HSR trainsets cannot be bought or produced in the United States 

within a "reasonable time" given the program schedule associated with Amtrak's and the 

Authority's projects. FRA estimates that it could take HSR trainset manufacturers a minimum 

of one and a half to two years to establish the required facilities to support a domestic HSR 

trainset assembly capability. This includes any HSR trainset manufacturers that currently have 

domestic trainset manufacturing facilities. For example, in addition to acquiring specialized 

machinery and training and hiring the workforce, these manufacturers' plants are customized 

for steel railcars, and HSR trainsets require aluminum, which requires different manufacturing 

techniques. 

Tier III HSR is a significant new technology for the U.S. market, and safety is a significant 

factor. Further, allowing final assembly of the prototype HSR trainsets at the manufacturer's 

existing non-domestic facilities is necessary to ensure that expected safety benefits of 

"service-proven" systems are secured, to enable training of U.S. workers, and to assure 

successful technology transfer. For example, rather than attempting to establish new 

manufacturing and assembly processes at a domestic facility while simultaneously integrating 

and testing HSR trainset designs, the selected manufacturers can focus on identifying and 

remedying any defects in the designs specific to Amtrak and the Authority and their 

operations in the United States. Further, FRA concludes that integrating U.S. manufacturing, 

assembly, and labor resources into the prototype production, among other suggested actions 

by Amtrak and the Authority, will facilitate the development of domestic HSR production 

facilities. This same "human technology transfer" has been used in other global HSR 

installations in South Korea, China, Taiwan, and Spain. 

FRA finds that this delay to provide "service-proven" systems makes the prototypes not 

available within a "reasonable time." Therefore, a waiver is appropriate. 
3 

On March 14, 2014, FRA published on its website public notice of Amtrak's and the 

Authority's waiver requests. FRA received 13 online comments and one mailed response to 

this notice. None of the commenters identified a domestic source for HSR trainsets. Ofthe 

14 comments, 10 commenters indicated they were against granting the waiver; four were for 

granting the waiver. Ofthe 10 comments "against," four were not responsive to the notice. 

Ofthe six remaining dissenters, they mainly disagreed with Amtrak's and the Authority's 

argument that HSR trainsets cannot be delivered in a reasonable time because Amtrak and 

the Authority could wait for domestic assembly. While this is theoretically possible, 

significant capacity and technology transfer problems are probable, and FRA believes that 

the one and a half to two year minimum delay could negatively impact the schedules 

proposed by Amtrak and the Authority. In addition, as noted above, assembling the 

prototypes at the suppliers' non-domestic factories will facilitate the successful technology 

transfer and training of U.S. workers. Finally, because FRA is limiting the waiver to final 

assembly of up to four prototypes with the expectation that the training of domestic resources 

will occur simultaneously, FRA is not delaying or preventing the establishment of the 

selected supplier's domestic assembly facilities. 

Pursuant to 49 U.S.C. § 24405(a)(4), FRA is publishing notice of its decision to grant the 

Authority's waiver request in the Federal Register and provide notice of such finding and an 

opportunity for public comment after which this waiver will become effective. This waiver 

applies only to the final assembly of up to two prototype HSR trainsets and is subject to the 

condition described at the beginning of this letter. 

Any components must be domestically manufactured or separate waivers for components 

applied for and granted before assembly of the prototypes can commence. FRA expects 

Amtrak and the Authority to require the selected HSR trainset supplier(s) to assemble the 

remaining trainset order(s) in the United States. 

Question about this letter can be directed to, John Johnson, Attorney-Advisor, at 

john.johnson@dot.gov or (202)493-0078. 

Sincerely, 

oseph C. Szabo 

1

Administrator